OneMain (US:OMF)2023-10-25 16:00Financial Performance - Net income for the three months ended September 30, 2023, was $194 million, compared to $185 million for the same period in 2022, while net income for the nine months was $476 million, down from $696 million[175]. - Adjusted pretax income (non-GAAP) for the three months ended September 30, 2023, was $252 million, compared to $246 million for the same period in 2022, and $651 million for the nine months, down from $956 million[182]. - Interest income increased by $49 million or 4% for the three months ended September 30, 2023, and by $64 million or 2% for the nine months ended September 30, 2023, compared to the same periods in 2022[167]. - Other revenues increased by $15 million or 9% for the three months and by $88 million or 19% for the nine months ended September 30, 2023, primarily due to higher investment revenue[170]. - Net cash provided by operations was $1.8 billion for the nine months ended September 30, 2023, compared to $1.7 billion for the same period in 2022[219]. Balance Sheet and Receivables - As of September 30, 2023, the company managed a total of 2.84 million customer accounts and $21.9 billion of managed receivables, an increase from 2.56 million accounts and $20.8 billion in receivables at December 31, 2022[149]. - Net finance receivables increased to $21,068 million for the nine months ended September 30, 2023, compared to $19,754 million for the same period in 2022[182]. - The company reported approximately 2.40 million personal loans totaling $20.8 billion of net finance receivables, with 50% secured by titled property[151]. - The number of open credit card accounts increased to approximately 339 thousand, totaling $232 million of net finance receivables, compared to 135 thousand accounts and $107 million at December 31, 2022[151]. - The allowance for finance receivable losses as a percentage of net finance receivables increased to 11.51% for personal loans and 21.69% for credit cards as of September 30, 2023[197]. Debt and Liquidity - The company issued $500 million of 9.00% Senior Notes due 2029 on June 22, 2023, to enhance liquidity[152]. - The stock repurchase program authorized up to $1.0 billion, with $681 million remaining as of September 30, 2023[154]. - At September 30, 2023, the borrowing capacity of the corporate revolver was $1.25 billion, with no amounts drawn[207]. - OMH had access to 15 revolving conduit facilities with a total borrowing capacity of $6.2 billion as of September 30, 2023[230]. - OMH's credit ratings are non-investment grade, impacting its cost and access to capital[223]. Expenses and Provisions - Interest expense rose by $44 million or 20% for the three months and by $88 million or 13% for the nine months ended September 30, 2023, primarily due to a higher average cost of funds[168]. - Provision for finance receivable losses decreased by $11 million or 2% for the three months but increased by $277 million or 28% for the nine months ended September 30, 2023, compared to the same periods in 2022[169]. - Other expenses increased by $31 million or 8% for the three months and by $91 million or 8% for the nine months ended September 30, 2023, driven by growth in receivables and strategic investments[171][172]. Regulatory and Compliance - The company agreed to pay a $4.25 million civil penalty related to cybersecurity improvements and $20 million in penalties and refunds to resolve investigations by NYDFS and CFPB[157][158]. - As of September 30, 2023, OMH's disclosure controls and procedures were evaluated as effective by the CEO and CFO[240]. - No changes in OMH's internal control over financial reporting occurred during Q3 2023 that materially affected its effectiveness[241]. - OMFC's disclosure controls and procedures were also evaluated as effective as of September 30, 2023, according to the CEO and CFO[243]. - OMFC experienced no changes in internal control over financial reporting during Q3 2023 that materially affected its effectiveness[244]. Shareholder Returns - OMH declared a total dividend of $3.00 per share for the current year, amounting to $362 million paid to shareholders[215]. - OMH repurchased 1,120,903 shares of its common stock for a total of $45 million during the nine months ended September 30, 2023[213]. - The company intends to maintain its minimum quarterly dividend of $1.00 per share for the foreseeable future, subject to Board discretion[217].